Effects of Public Hospital Reform on Inpatient Expenditures in Rural China

Public hospital reform is one priority area in the healthcare system reform that China launched in 2009. The Chinese government invested over $10bn for pilot projects in public hospital reform in rural China. However, little evidence exists on their effects. Using a quasi‐natural experiment design, we evaluated the effects of a public hospital pilot project in Hubei province on inpatient spending. We obtained inpatient claims data from 1/1/2011 through 6/30/2013 for enrollees in the New Cooperative Medical Scheme in two counties: Danjiangkou, one of the pilot counties selected for reform in September 2012, and Laohekou, a similar, adjacent county serving as the control group. Using a difference‐in‐differences approach with propensity score weighting, we found that total inpatient spending increased ¥1160 (95% CI 1155–1166), out‐of‐pocket spending increased ¥385 (95% CI 382–389), length of stay increased 0.51 days (95% CI 0.50–0.52), but inpatient medication spending decreased ¥147 (95% CI 145–150), post‐policy in Danjiangkou, relative to the control group. The overall reimbursement rate increased by 5.7 percentage points. One of the goals of the recent public hospital reform is to make inpatient services affordable to patients. We found that although patients spent less on inpatient medications, total out‐of‐pocket spending increased considerably after reform. Copyright © 2016 John Wiley & Sons, Ltd.